How serious is Toyota about battery electric vehicles (BEVs)? To find out, Editor-in-Chief Teruyuki Kagawa sat in on the company's briefing on BEV strategy on December 14, 2021.
The venue was Mega Web, Toyota's car theme park in Odaiba, Tokyo. At this point, it had already been decided that, after 22 years, Mega Web would close its doors for the final time on December 31, 2021.
"I missed this atmosphere," commented an excited Kagawa, clearly eager to view President Akio Toyoda's presentations in person again after a long wait.
President Toyoda always likes to surprise us, so I'm prepared for anything. I won't be surprised even if he comes out in a swimsuit!
When the curtain finally fell, Akio stood on stage, backed by what appeared to be five BEV models. "I believe that achieving carbon neutrality means building a world in which everyone living on this planet can live happily," began Akio, before emphasizing that creating such a world is Toyota's wish and mission as a global company.
He continued, "It is difficult to make everyone happy with a one-size-fits-all option." That is why Toyota wants to prepare for the future with as many options as possible.
"Specifically, we plan to roll out 30 battery EV models by 2030," Akio declared, "Globally offering a full lineup of battery EVs in the passenger and commercial segments."
"30?!" As Kagawa struggled to contain his surprise at the sudden announcement of concrete figures, a second shock awaited. What had seemed like a wall behind Akio was actually another curtain, which now dropped to reveal a further 11 BEV models.
"This is something else," commented an astonished Kagawa. The venue was filled with the excitement of "a car unveiling in the 70s."
The future that we showed you today is by no means far away. Most of the Toyota BEVs we introduced are models that will be coming out in the next few years.
We aim to achieve global sales of 3.5 million BEVs per year by 2030.
Akio then looked back over the past Toyota efforts that have led to BEVs.
Toyota launched the world's first mass-production hybrid electric vehicle, the Prius, in 1997, but BEV development had started even earlier. When it comes to batteries, Toyota has a long history of in-house efforts covering everything from R&D to production. Since 2006, Toyota Tsusho has also been working to secure stable supplies of battery resources. Alongside BEVs, in the 1990s Toyota also began developing hydrogen-powered fuel cell electric vehicles.
In today's world, the energy situation varies greatly by region. "That is exactly why Toyota is committed to providing a diversified range of carbon-neutral options to meet the needs of every country and region," stressed Akio. His stance is that, ultimately, the decision is up to local markets and customers, not Toyota.
Why is Toyota keeping so many options open? "Quickly adapting to changes in the future is more important than trying to predict the future," Akio explains. With the pace of change accelerating due to technological innovation, predicting the future becomes increasingly difficult. That is why Toyota wants to "keep options available for our customers until the right path is clear."
By working for the global environment and human happiness, Toyota seeks to become "a company that produces happiness for all," for both individuals and society.
Akio also spoke about the automotive industry, which includes 5.5 million colleagues who have supported manufacturing and mobility in Japan, and many more throughout the world. He closed his speech with this powerful message.
If we all take action with unity of mind and with will and passion, we will be able to leave behind many smiling faces and a beautiful Earth for the next generation. That is what I believe.
And that is what we will achieve.
"Having all those new models on stage is great," said Kagawa, his eyes lighting up. "Seeing something tangible and concrete right there makes it far more compelling."
With the venue full of excitement at the lineup of never-before-seen BEV models, Akio was soon joined by Lexus International President and Chief Branding Officer (CBO) Koji Sato, Chief Technology Officer (CTO) Masahiko Maeda, and Design Senior General Manager Simon Humphries for a Q&A session.
As expected, the media fired off questions that probed how serious Toyota is about BEVs. When asked whether the company would now prioritize BEVs or develop them in parallel with other technologies, Akio made it clear that Toyota is putting "serious efforts into all options." As a company that operates globally with a full lineup of products, Toyota can't afford to put all its eggs into one basket.
He also fielded one very direct question: "Do you like BEVs?" Akio couldn't help but chuckle in response. "That is a great question," he replied, before the serious expression returned and he explained his position. "My answer would be that I was not interested in Toyota's past BEVs, but I am getting interested in the BEVs that we are now developing for the future." Electric motors are far more efficient than gasoline-powered cars. Given that they can also be controlled more precisely than engines, electric motors can also be freely transformed for use in FF or FR vehicles. In the unique characteristics of BEVs, Akio seems to spot the potential for making ever-better cars.
This platform has enabled us to make vehicles that are safer, faster, and more fun to drive on various roads. This is a big change in our company.
Right after the briefing, Kagawa headed over to grab an interview with Akio. "Until now, Toyota has been seen as not being very proactive in BEVs," he began. "I'd like to ask you - was that really the case?"
Akio's response, as he has always said, was that "we want to provide diverse solutions for a diverse world." While many manufacturers treat BEVs as their only solution for tackling carbon neutrality, Akio stressed that, as a global company with a full lineup of products, Toyota was intent on pursuing every option.
Toyota Group also has a long history of working across all areas of energy production, transport, and use, covering everything from resource procurement to products in the BEV segment. The company certainly wasn't "unenthusiastic" about BEVs.
You emphasized that you're serious about BEVs as one option, alongside the others. You're serious about gasoline, FCEV, and PHEV (plug-in hybrids) as well.
We are. We're putting our utmost effort into all options.
Why does Toyota insist on diverse options? This unshakeable commitment stems from being a manufacturer with a full lineup of products ranging from passenger cars to commercial vehicles, from compact urban models to large SUVs capable of handling the toughest terrain.
Toyota is a global company that offers customers a full lineup of products. A single option will not be the solution for everyone.
That's true, I thought that was a great point.
When it is hard to predict the future, choosing to go all-in on one thing would be a reckless business decision.
We aren't so arrogant as to presume that our company can dictate the future. It's up to individual regions and customers to decide what they prefer. Once that decision is made, we want to be able to move quickly in that direction. I'd like Toyota to be that kind of company.
And, he added, Toyota is fully committed to every option because the company believes that "only products to which we give our all will please the customers."
Akio also highlighted a common misconception about carbon neutrality. The energy issue consists of three aspects - production, transportation, and use - all of which must be addressed to achieve carbon neutrality.
The discussion around switching to BEVs, however, only covers the "use" part of the equation. In regions such as Europe, where the production-side shift to renewable energy is well underway, BEVs can indeed become carbon-neutral vehicles.
Unfortunately, Japan still has a high percentage of thermal power in its energy mix, generating a large amount of CO2 on the production side. This makes it difficult to reduce emissions by simply increasing BEV use. Globally, the energy situation differs by region, meaning that an abrupt switch to BEVs is not always the ideal solution for lowering CO2 emissions. That is why Akio urges people to consider Toyota's BEV efforts in terms of "the number of cars, rather than percentages."
The announced "3.5 million BEVs" figure accounts for around 30 percent of Toyota's overall annual sales. In terms of the number of cars, however, it is large enough to rank around tenth among the world's automakers, demonstrating the scale of Toyota's commitment.
The pair's conversation also turned to the automotive industry. According to Akio, it is not up to Toyota, but the market and customers to decide which option to choose. If customers proceed to choose BEVs, what will happen to the 5.5 million colleagues working in Japan's automotive industry?
Suppliers and parts manufacturers in Japan could face employment impacts. What are your thoughts regarding these people?
A car company can't keep making cars unless we work with suppliers and other parties. Having worked all this time with these people to produce cars, I want to continue working together into the future.
Until now, there's only been a detached goal of "reaching carbon neutrality by 2050," with private companies left to figure out the rest. But for us working in the real world, it's not that simple.
For example, if you include those who transport goods, Japan has around 5.5 million people working in the automotive industry. If we switched entirely to BEVs, it's estimated that around 1 million of those jobs would be lost. I don't think we want that to happen.
In fact, during the briefing's Q&A session President Toyoda had also been asked for his thoughts on the supplier impact and employment issues in the industry. This was Akio's response:
About 75 percent of the parts in a finished vehicle are components procured from suppliers, with many tier two, tier three and further suppliers supporting the industry. Even if we keep many options available, the decline of internal combustion becomes a critical issue for suppliers who have solely produced engine-related parts. We shouldn't just say "that's the way it is because the market chose it."
I would like to make the automotive industry such that the people and companies who have been in the business for a long time, no matter what kind of work they do or the size of the company, will not be disappointed about the way they spent their lives.
I would like to make it possible for us to discuss, in a more concrete way, what we can do to ensure that what we have done so far remains meaningful even if the market shifts toward electrification.
As I mentioned in my presentation, the future will not be determined by the goals presented by leaders, but by purposeful passion and action. Regardless of the goal for carbon neutrality in 2050, the future landscape in 2050 will change depending on how we act in the next few years, five years, and ten years.
We also want to be a company that works together to do something meaningful for the lives of those who have come before us (in the industry).
"I don't want my hard-working colleagues in the automotive industry to feel their lives have been in vain." Akio's fierce determination could be seen in the way he responded, meeting the questioner's gaze head-on.
I certainly can't turn around and tell our suppliers, "That's too bad, we don't do that (technology) anymore." The people who have worked at these companies would come to me and demand that I give back the lives they've dedicated to us until now.
To ensure that those lives have indeed been meaningful, we're doing what we can to keep the options as open as possible.
Akio plans to deal with the coming changes by communicating closely with partner companies and being as specific as possible about "when and what the impact will be."
He is adamant that "Toyota's desire to create the future together, and to experience that future together, has not changed at all."
[Looking back at the BEVs] They really do look impressive.
Toyota's recent show models are almost identical to our final (production) cars. The technical assessments have all been done.
All done! But this is only half, right? Eventually, there'll be twice this many. Are you really going to sell 3.5 million of these?
Toyota is a company that does what it says.
What's the secret?
A strong will. I think it comes down to will.
Where does that strong will come from?
Probably because our genba is so solid. There are many people with me, so expect big things.
There is still much to be done, so I wish you all the best. Exciting times ahead.
With the interview done, Akio and Kagawa quickly reverted to their car-loving selves, chatting away in front of the BEV lineup.
"Which one would you like?" "Has to be Lexus, the SUV!" "I'd go for the one at the back..."